Yes, you can dilute it as you wish. There is an extensive discussion of fertilizer for orchids on the firstrays.com Web site. There is also a nitrogen calculator where you input the N number from the fertilizer package, and it gives you the amount to use for a given volume of water to get desired quantities of nitrogen in parts per million (ppm.)
How much fertilizer to use depends on how often you want to fertilize, and what stage of growth the plant is in. If your Phal won't be growing much over the winter because temperatures will be cooler, you won't need to fertilize very often. But if your house is warmer and it will be growing people often use 10-25 ppm nitrogen if they fertilize every watering, and 125-150 ppm nitrogen if they fertilize every 1-2 weeks.
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