You can either use the dirname and basename commands into a loop which reads the file line by line, or use the following parameter substitution:
Code:
P=${line%/*}
F=${line##*/}
where $line is the current line read from the file.
An aside note: don't use PATH as name of a variable in your script, since it is a reserved word for the environment variable PATH. If you change its value inside your script, most likely you will get "Command not found" errors for subsequent statements.