How can PHP be used to read and display data from a file on a webpage?

To read and display data from a file on a webpage using PHP, you can use the `file_get_contents()` function to read the contents of the file and then echo it out to display on the webpage.

<?php
$file = 'data.txt'; // specify the file path
$data = file_get_contents($file); // read the contents of the file
echo $data; // display the data on the webpage
?>