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My whole web site is .PHP including our home page(index.php) and we are at top of Google for most of our products.
Keep in mind, that Google could care less about the file extension. As long as the web page is parse as HTML, which PHP does, then it is find by Google.
I hope this answers your question. Go for it.
going through and renaming all files and changing links is too much work, of course if all file permissions are set to 0777 you can write a php file to go through and change all of the .htm(l) to .php in the source and then rename the file, but this is a lot of unnecessary work