The impact of the Covid-19 pandemic has been felt in a variety of industries.

t has been difficult

for all business sectors to cope. Many businesses have closed, and there have been numerous

changes and adjustments in various industries, particularly in the Philippines. The real estate

industry has been one of the greatly affected industries in the Philippines. According to one real

estate organization, “Philippines’ Real Estate industry, in particular, has been seriously impacted

by COVID-19 as the pandemic effectively put a stop to the operations of most businesses.” As

the pandemic and subsequent lockdowns continue to wreak havoc on economies, creating a

landscape that remains challenging and uncertain even today, real estate players have been

forced to quickly run through, revamp, and recalibrate their strategies in order to adapt to the

industry's sweeping, exceptional changes. These information obviously necessitate a thorough

search of several factors:

1. The market and competition, including demand, capacity, and price competition

The country's real estate sector is expected to thrive in the coming years; however, due to

the outbreak of a pandemic in the country, the prospects for the real estate sector have been

harmed, with economic trends, policies, and strategies being altered. Ethan Properties

Philippines Inc. markets to office locators and commercial tenants through internal and external

channels, and the majority of its commercially built estates are being heavily leased out to

entities in the BPO industry. However, due to pandemic brought by COVID-19, Colliers

International, a real estate consulting services firm, advises that converting and repurposing real

estate assets to survive the impact of the pandemic is a wise action because the real estate

industry reacts slower than the stock market due to its liquidity position and slow revenue

realization. On the other hand, this could be an opportunity for the real estate sector because
stock market investors are shifting to real estate investing because it provides more control and

long-term wealth.

The pandemic has clearly ensued in a slow realization of returns, particularly in the real

estate sector, where demand has slowed, and price appreciation has stalled. This factor has an

impact on the company's profitability, liquidity, and even solvency, increasing the risks of

material misstatements in the valuation of the company's assets and liabilities, and, at worst, a

high risk of continuing as a going-concern business entity.

2. Cyclical or Seasonal Activity

The real estate industry is highly dependent on several factors, including interest rate

movements and investor confidence in the Philippine economy, hence, it is called cyclical in

nature. Ethan Properties Philippines, Inc.'s sales are affected by these circumstances, particularly

in the residential market.

Businesses all over the world have been hit hard by the pandemic. It is hardly surprising

that the cyclical industry of real estate was severely impacted by the health crisis. The

Company's income from residential projects is anticipated to fall due to a shift in consumer

spending and overall customer decisions concerning demand for residential developments such

as condominiums.

3. Product technology relating to the entity’s products.

Prior to the COVID-19 crisis, the real estate industry had been digitizing processes and

developing digitally enabled services for tenants and users. Users' expectations will rise as more

users adopt these digital-first products and services, and players who provide a differentiated

post-crisis experience will stay ahead of the curve. Digitalizing real estate endeavors aids in the
promotion of newly constructed establishments to potential buyers. The website includes virtual

tours, which allow customers to view the showroom and other areas of the business by simply

using their computers. Furthermore, due to the current state of affairs, physical property viewings

have become nearly impossible.

Because of the rapid pace of technological change in an industry, an entity may hold

products that are no longer competitive. This can lead to lower revenues and overpriced

inventory. Vulnerabilities to cyber-attacks may also be a risk of expanding and developing more

real estate technology. Data breaches are possible.

4. Regulatory Factors

The government is fighting COVID19 by imposing regulations that will protect citizens

from the virus, such as work suspension, limiting people's ability to go outside based on their

age, and so on. Due to the pandemic, the government enacted the Bayanihan Act, which provides

a one-time sixty (60) day grace period for loan payments and directs all banks, financing

companies, lending companies, real estate developers, insurance companies, pre-need

companies, and other public and private financial institutions to pay loans due on or before

December 21, 2020 without interest, penalties, or other charges. To effectively implement the

regulations, the government encourages everyone to work from home and to educate themselves

at home. As a result of the officials' encouragement, many tenants returned to their own homes,

causing rents and real estate prices to fall.

Due to changes in economic conditions and the business environment, as well as

unforeseeable factors, it is possible that some of those reforms will be difficult to implement and

others will not achieve the originally planned results. The company's development projects are
subject to a wide range of government regulations, making it vulnerable to changes in

government policies. Interest rate fluctuations, changes in government borrowing patterns, and

government regulations could all have a material negative impact on the Company's and its

customers' ability to obtain financing. The company is exposed to credit risk and will be forced

to stop offering in-house financing which will push buyers to pay in cash.