PHP_INCLUDE_DIRS is the directory where the PHP source is located, i.e. "C:/php-5.4":
set(PHP_INCLUDE_DIRS "C:/php-5.4")
PHP_LIBRARY is the path where the php5ts.lib is located --- this file is usually located in dev directory from the binary PHP installation, i.e. "C:/php/dev/php5ts.lib":
set(PHP_LIBRARY "c:/php/dev/php5ts.lib")