Simplest method to upgrade PHP in XAMPP:
1. Download latest portable version of XAMPP.
2. Extract the archive(not where XAMPP already installed).
3. Copy the PHP folder from the extracted archive.
4. Keep back up of PHP folder which is in installed XAMPP directory. You can backup it like changing the PHP folder name to PHP-old or like PHP-version-number
5. Paste the PHP folder which you copied from the extracted archive.
6. Replace the php.ini file with your backup folder php.ini file in case you have changed the default settings earlier.
7. That's all, start/restart the server.