I intend to make a dynamic list in php, for which I have a plain text file with an element of the list in every line. Every line has a string that needs to be parsed into several smaller chunks before rendering the final html document.
Last time I did something similar, I used a file() function to load my file into an array, but in this case I have a 12KB file with more than 50 lines, that will most certainly grow bigger over time. Should I load the entries from the file to a SQL database to avoid performance issues?
Yes, put the information into a data base. Not for performance reasons (in terms of sequential reading) because a 12KB file will be read very quickly, but for the part about parsing into separate chunks. Make those chunks into columns of your DB table. It will make the whole programming process go faster, with greater flexibility.