The Philippines plunged into recession after its biggest quarterly contraction on record, data showed on Thursday, as the economy reels from Covid-19 lockdowns that have wrecked businesses and thrown millions out of work.

Gross domestic product shrank 16.5 per cent year-on-year in the second quarter, the Philippine Statistics Authority said, when the country endured one of the world’s longest stay-at-home orders to slow the spread of the virus that has devastated economies globally.

It followed a revised 0.7 per cent contraction in the first three months of the year and marked the biggest reduction in economic activity since records began in 1981, during the Ferdinand Marcos dictatorship. It is the country’s first recession in three decades.

The outlook for the archipelago is bleak, with the number of coronavirus infections surging past 115,000 this week – a more than fivefold increase since early June when the economy-crippling restrictions were eased.

Acting Secretary for Socioeconomic Planning Karl Chua said: “Without doubt, the pandemic and its adverse effects are testing the economy like never before. But unlike the past, the Philippines is now in a much stronger position to address the crisis.”

As health workers struggle to cope with the influx of patients, more than 27 million people in Manila and four surrounding provinces on the main island of Luzon – which accounts for more than two-thirds of the country’s economic output – returned to a partial lockdown for two weeks on Tuesday to help ease the strain on hospitals.

But President Rodrigo Duterte, who was reluctant to tighten restrictions after millions lost their jobs in the first shutdown, has warned that the country cannot afford to remain closed for much longer.

“The problem is we don’t have money anymore. I cannot give food and money to people anymore,” he said on Sunday.

The country’s economic woes have been exacerbated by a drop in remittances from the legion of Filipinos working abroad who typically send money to their families every month, which fuels consumer spending – the main driver of growth.