The Dragons lost their opening match of the competition 30-22 to Ireland in Cardiff, which marked their eighth consecutive defeat.
However, Phillips believes that the Welsh, who have since won all of their matches in the tournament as they look to retain their crown this weekend against England, deserve respect for their return to form.
"We have had to dig deep but the boys have done that really well," said Phillips.
"We've performed really well in the last couple of weeks but then, we always knew we weren't a bad team.
"We had a bit of bad luck losing games in the last seconds, we had to fine tune a few things and tighten up."
Wales host England on Saturday and need to win by an eight-point margin if they are to successfully defend their Six Nations title.