My view is different to that of spinals, that this is a Homebrew competition, so anything that runs under the games memory stick part of the psp would be, in my view a suitable entry.
It depends on how you would define the competition, really-- a coding competition should allow it, although I wouldn't class it as an entry into a Homebrew competition.
Either way, I think they should allow it-- its just another language, and its only fair. After all, they do allow LUA as a suitable language alongside the C/C++, so why not PHP?
In other words, I think it should be allowed even though I'm against it-- just to be fair.