Sheffield Wednesday had snatched the lead after former Stoke defender Lewis Buxton grabbed his first goal for the Owls.
The 25-year-old defender, who signed for the Hillsborough side earlier this week after a loan deal, struck in the 57th minute, with Phillips having the last word in the third minute of stoppage time.
Birmingham, now with just one win from their last six, started the stronger with midfielder Lee Carsley threading the ball to Cameron Jerome who was robbed ten yards out by a Mark Beevers last-ditch tackle.
Wednesday escaped again after failing to cut out on Hameur Bouazza's teasing cross from the left.
Lee Bowyer, on loan from West Ham until the end of the season, connected with a header at the far post but it was pushed out by the diving Lee Grant.
Jermaine Johnson showed his pace skipping past full back Stuart Parnaby to drill in a fierce strike from 20 yards which was smothered on the line by the diving Maik Taylor as the Sheffield side probed for an opening.
It almost came from on-loan Wolves midfielder Darren Potter but his free-kick from the edge of the area was repelled by Taylor.
Scott Sinclair was foiled by Grant with the Wednesday keeper blocking his long-range strike with his legs before Bouazza fired wide.
Birmingham squandered a chance to snatch the lead five minutes after the restart.
Bouazza picked out Jerome who outpaced centre-back Richard Wood only to curl the ball wide of the target from a tight angle as Grant guarded the near post.
Buxton broke the deadlock after Birmingham failed to clear a Potter cross. Marcus Tudgay lashed in a low strike that was blocked and Buxton headed in from close range after his first effort was beaten out.
Tudgay almost added a second with a stinging shot from 22 yards and Leon Clarke had a low strike blocked before Phillips bundled Sinclair's cross over the line for his 12th of the season right at the death.