NOTE: This is a condensed excerpt from my forthcoming (2014) commentary on Philippians.
As evangelicals we often talk about ourselves as “sinners saved by grace.” While this statement is true, the Bible also describes believers as saints. According to its consistent use in the NT, the term translated saints (hagios) refers to all believers, not a special class of individuals who are super-spiritual as in the Roman Catholic tradition. The term simply means “holy ones” or those “set apart” for God’s special purposes,[1]so in that sense every Christian is a “saint.” This language is drawn from the OT (Exod 31:13; Lev 11:45; 19:2; Dan 7:18, 27), and particularly Exodus 19:5-6, where God refers to Israel as “a kingdom of priests and a holy nation.” Believers’ status as “holy ones” stems from the fact that God himself is holy (Lev 11:44 1 Pet 1:13-16). So believers demonstrate that they are set apart for God’s special purposes by living lives that reflect (albeit imperfectly) the moral purity of God himself. So while the focus of the term is on the believer’s status/identity because of their faith in Christ, those who truly have that status will reflect it in their lives (Heb 12:14).
[1] See BDAG 2.d.β. Fee suggests translating hagios as “God’s holy people” which he explains as “believers in Christ as constituting God’s people, set apart by the Holy Spirit for God’s purposes and distinguished as those who manifest his character in the world” (Philippians, 65).