We report on the observation of p-type conductivity and ferromagnetism in diluted magnetic semiconductor $(Zn_{0.97}Mg_{0.01}Mn_{0.02})O:P$ films grown on $SiO_2/Si$ substrates by pulsed laser deposition. The p-type conduction with hole concentration over $10^{18}cm^{-3}$ is obtained by codoping of Mg and P followed by rapid thermal annealing in an $O_2$ atmosphere. Structural and compositional analyses for the p-type $(Zn_{0.97}Mg_{0.01}Mn_{0.02})O:P$ films annealed at $800^{circ}C$ indicates that highly c-axis oriented homogeneous films were grown without any detectable formation of secondary phases. The films were found to be transparent in the visible range. The magnetic measurements clearly revealed an enhancement of room temperature ferromagnetism by p-type doping.