How does the interest in the paluwagan work?

So is it any different if you saved say 12x 100 pesos and get 1200 pesos at the end of the year, or join a paluwagan and chip in 100 pesos per month and get 1200 at the end of the year (or whenever your name gets picked)...

Sorry I have heard of this before, in fact there was a popular one in our neighborhood in Manila, but I don't seem to get the point? (except of course if the person does not have a bank account..)

Thanks,
Daks