Alastor and Ebony & Ivory (Handguns) are recommended when fighting Phantom.
Phantom has two weak points that you should aim to exploit, his face and back. As for his attacks, he will use a claw swipe that he will try to knock you away with if you try to take him head on. He will occasionally use lava pillar attack that will come out of the ground beneath you. Just run to avoid that attack.
He will also try to jump and land on you. When this happens jump in the opposite direction and you should avoid it. His other attack is to launch a fireball at you out of his mouth, barreling rolling at a good distance should avoid it.
Shooting at him from afar with your pistols can only do so good as well, as he puts up his pincers to shield his face and charge you. The best strategy for this battle is to get up close and personal with your Alastor and slash away at his face when possible, followed by his back when he attempts to cover his face, and retreating every so often to shoot him from a safe distance. If you have Air Raid at this stage of the game you should certainly use it as it is very effective against Phantom.