\php\php.ini is the correct location for your installation of Moodle.
To be able to upload
files larger than 32 MB, you actually need to change 2 settings in php.ini. It's not a Moodle specific thing but a PHP requirement. The two settings in your php.ini should be set to identical values (128 MB in this example)
upload_max_filesize = 128M
post_max_size = 128M
After making the change, you must stop and restart your Moodle/Apache
server for the changes to take effect.
By default, Moodle will automatically accept these settings and use them. However, if you ever changed the maximum uploaded file size setting in Moodle, it may now be limiting your maximum upload size. You might need to go into Moodle's settings and update the maximum uploaded file size by navigating to:
Site administration > Security > Site security settings > Maximum uploaded file size
If you don't need to change it, don't even save this setting in Moodle unless you want to make it lower than Apache/PHP's maximum that you set above.
For more information on adjusting the maximum upload size, see:https://docs.moodle.org/en/File_upload_size