I placed a custom php.ini file in my public_html folder:

Now browsing example.com/phpinfo.php says the new config works:

However, Joomla’s still not using the new config. When you go to Joomla’s Admin area > Site > System Information > PHP Information it still says 2M.

Any ideas why?
This link stipulates that the 6th block on the PHP Information page (shown in your question) displays the path to the php.ini used by the Joomla installation.
Link: http://forum.joomla.org/viewtopic.php?t=350630
A good point mentionned again in the Joomla forum post from the link is that if you’re on a shared host, you typically don’t have access to the php.ini file. Still, someone mentionned this:
Perhaps you can try that alternative? Is your public_html folder the top level Joomla installation folder?
EDIT: Someone mentionned that he had the same exact problem you have (upload size), and this is what he did:
Again coming from the Joomla forums post in the provided link. You can replace the 30M with whatever value you need.