Depending on how the server is setup, if it is a shared hosting environment and someone on that server has shell access, they will be able to view any file within the server if the shell access is not properly secured (ie. full /bin/bash access and not jailed shell). In this case, they'll be able to view files but won't be able to edit it.
PHP is kept up-to-date fairly quickly... if a flaw is found within the PHP binary, the PHP group gets on top of it quickly and releases fixes. In most cases though, whenever there is an exploit with a php script, it's not the php processor but a poorly coded php script (ie. phpNuke modules have some serious exploits or at least they used to which allowed spammers to spam through vulnerabilities, phpBB had some serious issues with a worm last year, etc).