Create transparent png with text from scratch in php

Here's the solution based on your original code.

<?php
    $width = 640;
    $height = 480;
    $text = "My Text";
    $fontsize = 5;

    $img = imagecreate($width, $height);

    // Transparent background
    $black = imagecolorallocate($img, 0, 0, 0);
    imagecolortransparent($img, $black);

    // Red text
    $red = imagecolorallocate($img, 255, 0, 0);
    imagestring($img, $fontsize, 0, 0, $text, $red);

    header('Content-type: image/png');
    imagepng($img);
    imagedestroy($img);
?>

<?php
    $font = 25;
    $string = 'My Text';
    $im = @imagecreatetruecolor(strlen($string) * $font / 1.5, $font);
    imagesavealpha($im, true);
    imagealphablending($im, false);
    $white = imagecolorallocatealpha($im, 255, 255, 255, 127);
    imagefill($im, 0, 0, $white);
    $lime = imagecolorallocate($im, 204, 255, 51);
    imagettftext($im, $font, 0, 0, $font - 3, $lime, "droid_mono.ttf", $string);
    header("Content-type: image/png");
    imagepng($im);
    imagedestroy($im);
?>

Use imagestring instead of imagettftext if you don't want custom font.