Phat at first glance is a virgin slang word, an inventive
new superlative (meaning either sexy or cool) conceived
of and delivered in the rap idiom of the hip-hop culture. In
the Fall 1994 issue of American Speech, John and Adele
Algeo postulate that phat may have been devised as an
acronym for "Pretty Hips And Thighs"; others have
speculated that it was drawn from "physically attractive."
If you forget the cute spelling, though, and look at fat, the
explanation is probably a lot simpler.