MANILA, Philippines — A proposed legislative measure that seeks to regulate paluwagan, a saving scheme popular among Filipinos, was approved on second reading by the House of Representatives last Tuesday.
House Bill 10284 is the consolidated version of several related measures that aim to regulate the organization and operation of paluwagan, a form of community fund pooling.
Paluwagan was once tagged by the Department of Trade and Industry (DTI) as a form of pyramid scheme as it involves a group of people pooling their money as savings.
Under this system, the pooled funds are given to a certain member on an agreed date by an individual who is appointed as collector. The cycle continues until all of the members have received their shares.
The order of payout is usually determined by drawing of lots.
Under the bill, paluwagan will be “formalized and strengthened for the protection and benefit of the people.”
The measure mandates the creation of the Community Paluwagan Administration that will be attached to the DTI, which will oversee paluwagan operations.
It sets the guidelines for creating paluwagan, such as applying for registration for those with nine or more members.
The bill shall also require insurance for the members.