Philip Morris International yesterday unveiled a joint venture in the Philippines that will see it team up with Fortune Tobacco, a local cigarette maker owned by tycoon Lucio Tan, to create a company that will control 90 per cent of the domestic cigarette market.

The newly formed PMFTC is expected to build on the two companies' dominant positions in various segments of the Philippine cigarette market, which had an estimated volume of 85bn sticks last year, making it the world's 12th biggest. Tobacco consumption in the Philippines was estimated to be worth 78.9bn pesos ($1.7bn) in 2009, according to the government's statistics agency.

The tie-up comes as other western tobacco groups seek to boost their presence in emerging markets, to counter a fall in smoker numbers in more developed markets as a result of tighter regulation, smoking bans and health concerns.

Last year British American Tobacco bought a majority stake in Bentoel Internasional Investama, Indonesia's fourth-largest cigarette maker, for $494m. Morris already has a big presence in Indonesia, mainly through its Sampoerna unit, which it bought for $5bn in 2005.

The joint venture between Morris and Fortune operations will not only give the two almost total control of the local market but could also boost their ability to lobby against moves to increase taxes on cigarettes and adopt tougher rules on tobacco marketing and advertising.

The Philippines imposes one of the lowest taxes on cigarettes in Asia and has yet to adopt tough tobacco control laws.

Morris's Philippines unit, which has a market share of 30 per cent, dominates the high-end segment of the market with brands such as Marlboro and Morris.

Fortune, with a 60 per cent market share, leads in the medium and low-priced segments of the market.

Mr Tan, majority owner of Fortune, is the second richest man in the Philippines and has a vast business network.