The 28-year-old has struggled for game time since signing for Cityin the summer of 2022 but is not short of suitors in the Premier League and on the continent.
Eagles boss Roy Hodgson confirmed his side’s interest in the treble winner earlier this week.
As well as the loan fee, City are looking for Phillips’ full wage of around £135,000 per week to be covered by interested parties.
His future is set to be decided before the end of the January transfer window with the player keen on remaining in Gareth Southgate’s plans for Euro 2024.
West Ham move into pole position for Phillips
West Ham have room in their wage bill to pull off this kind of deal having off-loaded Thilo Kehrer to Monaco for the rest of the season. They are also open to allowing Said Benrahma to leave the club this month with teams in Ligue 1 keeping tabs, according to the Evening Standard.
Meanwhile, TEAMtalk reports that Phillips’ representatives are keen for City to lower the £7m loan fee in order to help their client force a move this winter. West Ham are now clear favourites to land Phillips with discussions ongoing with City regarding an initial loan deal and an option to buy come the end of the season.
Phillips is under contract with Pep Guardiola’s team until 2028 but has been more or less frozen out by the Spaniard this term, appearing in only four Premier League games.