Phillips, who finished as the runner-up in last year’s British Superstock 600 Championship, was left without a ride this season after Sandown Racing signed Robert Kennedy.
However, just when it seemed as though Phillips was left with no suitable alternatives, Ballymoney star Dunlop stepped in and offered the 23-year-old a 1000cc machine.
The pair became friends over the past year and Phillips is thrilled to have the opportunity to ride under the 13-time Isle of Man TT winner’s MD Racing banner.
“It’s an amazing opportunity for me and I’ve got to say a big thanks to Michael for stepping in to help me out,” Phillips said.
“I became good friends with him last year and when he learned I didn’t have a ride for this season, he spoke to a few teams to try and get me sorted out with something.
“In the end there was no real option there because teams are just asking far too much money to give you a job.
“It wasn’t looking good but Michael then said he’d provide me with a Superstock bike for the British championship. Basically it’ll be a sister bike to whatever he decides to ride this year on the roads.
“I’ll have to come up with some budget to cover the costs of running it and we’ll aim to do the first three rounds of the championship at least and then go from there.
“Hopefully with Michael behind me, there might be a few sponsors interested in becoming involved. There’s no pressure on me and this will be my first time ever riding a 1000cc Superstock bike, but if I manage to get a full season out of it, then I’d like to think I could be in a position to challenge for the top three at by the end of the year.”
Phillips caught the eye this year as he went close to winning the Superstock 600 title before claiming a brace of third places at the Sunflower Trophy meeting at Bishopscourt in October in the Supersport class.
The Lisburn lad was offered a one-off ride on the Gearlink Kawasaki for the Irish short circuit meeting and was only beaten by team-mate and British Supersport frontrunner Andrew Irwin plus David Allingham, who also impressed in the Supersport series last year on the EHA Racing Yamaha.
Phillips was named the Blackhorse Short Circuit Rider of the Year [on GB circuits] at the Cornmarket Motorbike Awards in Belfast last month.
Dunlop himself has yet to confirm on his plans for 2017 after riding BMW machinery in the big bike classes in recent seasons for Hawk Racing.