Put folding.vim under your vim installation directory under a ftplugin/php/ directory.
For me, for example, that's under ~/.vim/ftplugin/php/folding.vim, or for nvim ~/.config/nvim/ftplugin/php/folding.vim.
you can also add the following options to your .vimrc to configure the way your folds behave:
" 1 = true, 0 = false
" convert '@return ReturnType' to ': ReturnType' in function preview if there is no return type specified in the function declaration
let g:php_fold_return_comment_as_declaration=1
" convert function access (public, private, protected) to UPPERCASE in preview
let g:php_fold_uppercase_access_types=0
" if the return type can't be found from an @return tag or a return type declaration, show the return type as ': unknown type'
let g:php_fold_show_unknown_types=1
" the maximum length for function comments (accross all lines) before being truncated with '...'
let g:php_fold_comment_length=60
" show a preview of the first line in the fold, otherwise show the number of hidden lines
let g:php_fold_show_fold_preview=0
