The Eagles are currently six points from safety at the bottom of the table following nine defeats from their opening 10 matches.
Despite Palace's poor start to the campaign, veteran striker Phillips is confident that there is still hope for the team.
"You've got to try and keep the spirits high," he told the Croydon Guardian. "I've been in many dressing rooms over the years where we've been scrapping relegation and you have to try and take that experience on board and pass it on.
"We can't feel sorry for ourselves. There's still a long way to go. Yes, it's going to be a tough, tough struggle but you've got to keep believing."
Palace continue their fight for Premier League survival on Saturday when they welcome Everton to Selhurst Park.