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Problem with php coding?

Im new to php and i/m making a php website... everything works fin until i put the php code. when i see the page in the browser it shows the php code as text and i don't know whats wrong with it. <?php
$form ="<form action = 'login.php' method = 'post'>
<table>
<tr>
<td><input type = 'text' id='usernamebox' name='username' tabindex='1' value='Username' class='textbox' onfocus='usernamebox_focus();' onblur='usernamebox_blur();'></td>
<td><a href='register.php'>Register</a></td>
</tr>

<tr>
<td><input type = 'password' id='passwordbox' name='password'tabindex='2' value='Password' class='textbox' onfocus='passwordbox_focus();' onblur='passwordbox_blur();'></td>
<td><input type ='submit' name='loginbutton' value='Login'tabindex='3' class='button'></td>
</tr>
</table>
</form>";

if ($_POST['loginbutton']){
$user = $_POST['username'];
$password = $_POST['password'];
if ($username && $password && $usename!="Username"){
require("design/connect.php");
$password = md5($password);
$query = mysql_query("SELECT * FROM users WHERE username = '$user' AND password = '$password'");
$numrows = mysql_num_rows($query);
if ($numrows == 1){
$rows = mysql_fetch_assoc($query);
$dbuser = $rows['username'];
$dbid = $rows['id'];

$_SESSION['user']= $dbuser;
$_SESSION['id']= $dbid;
echo"<center>You are logged in.</center>";
}
else
echo "<center>Username not found</center>";
}
else
echo"<center>You did not submit a username and/or password.</center>";
}

else{
echo "$form";
}

?>

any help is appreciated