While working up my recommendations for various books of the Bible, I looked up how two commentators, Ralph Martin and Gordon Fee, handle Phil 2:12. While both men believe that perseverance is required to attain “final salvation,” neither sees Phil 2:12 as dealing with that.
Obedience in this case takes the form of work out your own salvation, meaning “in your relationships with one another live out the salvation Christ has brought you.” This is therefore not a text dealing with individual salvation but an ethical text dealing with the outworking of salvation in the believing community for the sake of the world. That they must comply with this injunction at the individual level is assumed, and that their final salvation will be realized personally and individually is a truth that does not need stating, because that is not at issue here. The present concern is with their being God’s people in Philippi, as 2:15 makes certain (Philippians, The IVP NT Commentary Series, p. 104).
Continue to work out your salvation has often been wrenched out of its context and made the basis of a theological discussion which, however true and necessary in a general statement of New Testament theology, is not relevant in this section of the letter…
It seems clear, however, that the true exegesis must begin with a definition of salvation, not in personal terms, but in regard to the corporate life of the Philippian church. The readers are being encouraged to concentrate upon reforming their church life, ‘working at’ (Moffatt) this matter until the spiritual health of the community, diseased by strife and bad feeling, is restored…The apostle is urging the Philippians to have their eyes fixed on the interests of others (see Commentary on 2:4) and not to be preoccupied with their own concerns. The reference here must look back to 1:28, where the salvation of the Christian community as a whole is in view” (Philippians, Revised Edition, Tyndale Series, pp. 116-117).
These commentators do not agree with Free Grace theology. Their comments make that clear. Yet both recognize that the context is not about individual salvation from eternal condemnation, but about corporate spiritual health!
I happen to think that the Free Grace explanation is even a bit clearer. Here is how Greg Sapaugh explains Phil 2:12 in The Grace New Testament Commentary, Vol 2:
2:12-13. In light of the example of Christ Paul now uses the example of three people to illustrate the Christ-like pattern he is addressing.
Using himself as the first example, Paul exhorts the Philippian believers to obedience. They manifested obedience when he was with them before; now they are to behave in the same way in his absence. Paul’s specific admonition is to work out your own salvation. The salvation (sōtēria; cf. 1:19, 28) he refers to is equivalent to sanctification, for eternal salvation (justification) is by faith, not works. That the working out of salvation is equivalent to obedience is clear from the parallelism in 2:12. The Philippians obeyed during Paul’s presence with them in the past. They are now to work out their salvation during his absence. Whereas Paul’s past presence resulted in their obedience, so Paul’s present absence is to result in their working out their salvation.
The Philippians were to keep on working for Christ and thereby keep on growing toward maturity. As the believer humbly serves God with a healthy respect for Him, he can be assured that God is working with him and through him. The type of relationship in which there is mutual cooperation between the believer and God brings Him pleasure.
2:14-15. One positive step the Philippians can take in the process of sanctification is to live a life without complaint or disagreement. The purpose of such a life of contentment is a positive testimony to a dark and sinful world. To shine as lights and be an effective testimony to their city, nation, and world, the believers need to put aside conflict, so as to be blameless, untainted by sin.
2:16. As the Philippians cling to Christ and His message, the word of life, Paul will see that his work on their behalf was effective and will be a ground of rejoicing by him in the day of Christ, that is, the Judgment Seat of Christ.
See also this 2006 article on Phil 2:12 by me and this outstanding 2016 journal article on “‘Salvation’ in the Book of Philippians,” by Bob Swift, who recently went to be with the Lord.