Phillips struck with a powerful angled drive in the 86th minute to deny their neighbours in front of a bumper League One crowd of 22,939.
Before Phillips pounced, Wolves had looked destined to record a ninth win in 10 league games thanks to an eighth goal of the season from Leigh Griffiths.
Scotland international Griffiths opened the scoring after 68 minutes, drilling his shot past goalkeeper Joe Murphy after Coventry had failed to deal with a lofted cross from Scott Golbourne.
But City were well worth a share of the spoils and their never-say-die attitude was rewarded when Callum Wilson picked out Phillips, who had only been on the field for three minutes, and he saw his shot fly beyond the outstretched arm of Carl Ikeme.
Wanderers had been dominant in terms of chances created but they struggled to really test Murphy before the clinical finish from Griffiths.
Murphy did beat away a fierce drive from James Henry 60 seconds into the second half but Wolves were left to rue the chances they squandered.