Speaking at the weekly post-Cabinet briefing, Prime Minister Christopher Luxon says the day has been "sombre".
He said he had been briefed on the situation by Acting Police Commissioner Mike Pannett, and was briefed that the officer who was shot was being operated on in Waikato Hospital.
"This is a constable who was out looking after his community and what's happened is a reminder that police put themselves on the line every time, every day they put on that uniform."
He said New Zealanders thoughts were with the officer and also with the missing children.
"Social services are working with police and are on standby to support them, and this morning's events are not how anyone would have wanted this to end... police are naturally devastated by what's happened to their colleagues but right now they are getting on with the job."
Luxon said he was "very concerned" about the welfare of the missing children, noting searchers were running out of daylight hours.
He said he was not aware of whether the defence force had been asked to assist in the search.
"There will be a series of question to ask in due course, but today just isn't that day.
"Today is a day where we are thinking and praying for a fallen police colleague, we are also making sure those children can be found as quickly and as safely as possible."
He said any escalation plan for if the children weren't found in the next day or so was an operational matter for police.
He also did not have any further detail on any rewards that might be offered for information.
Asked how the four-year manhunt reflected on New Zealand internationally, given it made global headlines, Luxon said it was "a sad and absolutely tragic event".
"We're used to seeing these stories from other parts of the world but not here in New Zealand, and it's certainly a very sad and tragic day."
It is alleged that Phillips was shot dead by police after ram-raiding a building in Piopio.
A local police officer was shot during the incident and was undergoing surgery.
Phillips and his three children had been missing for almost four years.
One of the children has now been taken into custody but the other two are still missing.
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