03/09/2025
Paluwagan in the Workplace: Helpful or Harmful?
As someone who has spent many years teaching financial literacy,
I’ve seen how paluwagan (rotating savings system)
can be both a friend and a foe in the workplace.
For those unfamiliar: a group of employees agree to put in a fixed amount (say ₱1,000 a month). Each month, one person takes the full pot (₱10,000 if 10 members). It rotates until everyone has had their turn.
It looks simple, but the effects are mixed.
👍 The Good
Builds discipline by forcing people to save regularly.
Provides lump-sum cash that can help pay tuition, bills, or big expenses.
Strengthens trust and camaraderie among co-workers.
👎 The Not-So-Good
No legal protection — if someone runs away after getting their share, the rest suffer.
Peer pressure may push employees to join even when they can’t really afford it.
Can cause workplace tension when someone delays or fails to pay.
No growth on savings — your money does not earn interest.
My Personal Take
I have to be honest: I am not in favor of paluwagan as a long-term solution. It may work for short-term goals, but it should never replace real financial tools like:
Emergency savings funds & Owne Cash Reserves
Health-Medical Insurance
SSS and Pag-IBIG benefits
Proper bank savings and investments (UITFs, Mutual Funds, REITS, Direct Stock Market Investing and yes even Bitcoin HODL)
Practical Advice for Employees
If you do join a paluwagan:
Keep it small and with people you truly trust.
Set clear rules, deadlines, and penalties.
Treat it only as a short-term tool — not your main financial plan.
But if you want your money to grow and to secure your future,
focus instead on building real savings, learning to invest,
and protecting yourself with insurance.
Paluwagan may be part of Filipino culture, but financial wellness
means going beyond tradition.
Start building habits that let your money work for you,
not just circle around the group.
