Both Phillipson and Powell successfully reached the required threshold of 80 nominations from fellow Labour MPs to proceed to the final stage.
Phillipson secured 175 nominations, while Powell garnered 117, disproving earlier speculation that Phillipson might be the only candidate to qualify.
The contest was initiated following Angela Rayner's resignation as deputy leader after an inquiry found she did not meet ethical standards for ministers regarding a home purchase.
While the result is due on 25 October, the contest is anticipated to overshadow Labour's annual conference, with some observers considering it a referendum on the prime minister's leadership.