PHP support of Unicode?

When using PHP, writing content in my local language and my neighbouring 
contries' language, ISO 8859-1 has been sufficient as a character 
encoding. But using PHP with other languages, is that possible? I mean, 
does PHP support Unicode at present time? As I understand it, the 
following statement is true:
"PHP supports Unicode only as long as it is encoded as UTF-8"

Is that correct, or does PHP also support UTF-16?

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