Holding, 20, has been linked with the Gunners, as well as Everton and Bournemouth, following a season in which he was named as Bolton's Player of the Year.
The defender - who has risen through the ranks at Bolton, who were relegated from the Championship last month - was due to feature in the team's clash with Fulham at Craven Cottage but was omitted from the travelling party just one day before the game.
Bolton manager Phillips has now revealed the decision was taken after the club's owners instructed him not to play Holding for fear of any injury scuppering a prospective deal for the player.
"I was asked by the board of directors not to play him yesterday," he told The Bolton News. "He was in the line-up on Friday morning but that's as much as I know.
"It would appear some clubs are interested in him somewhere down the line. I think the wheels are still in motion on that one and it'll be a few days before we get an outcome."
He added: "If the deal goes ahead and the money is used to improve the squad as a whole then we can judge then whether it was a positive outcome."
