Phalula powered across the finish line in thirty two minutes, 27 seconds (32:27), setting a new personal best time over the distance.
The 30-year-old runner said she was thrilled with the result and believed she had it in her to do better.
“I’m so happy and motivated by the new time that I ran today,” Phalula said after the race.
“This shows that I can run 31 minutes and that’s what I’m going to aim for going forward.”
Three time grand prix champion, Rene Kalmer finished second, a minute behind Phalula, while 2013 grand prix champion Mapaseka Makhanya finished third in 33:28.
Phalula dominated the 10km race, clinching her second successive win in the grand prix after winning the first leg in Cape Town.
Together with Rene Kalmer, Phalula now holds the fourth fastest time by a woman in South Africa over the 10km distance.
Elana Meyer remains the fastest 10km runner in the country, with a time of 31:13 which she set in Budapest in 2001.
Colleen de Reuck holds the second fastest time of 31:16 run in Atlanta in 1996, while Zola Budd is third fastest after posting a 31:42 finish in Oslo in 1984.
Running in perfect weather conditions, a pack of eight led a large field, as thousands of women took to the streets of Port Elizabeth.
Phalula staged an aggressive charge as she approached the second kilometre, where she pulled away to take the lead.
By the fourth km mark, she held a comfortable lead and started an impressive solo journey until the finish line.
“From the first kilometre, I got more relaxed and my body was very flexible and I just told myself that if I want to run, I’m not going to run against anyone, let me run against time.
“From the second kilometre, that’s when I started telling myself to move. If they come, they’ll come or they’ll fetch me at the finish line.
“From then on, I didn’t feel the race. It was much easier and I didn’t even feel the hills, because when you’re in good shape, you don’t really feel the hills.”
Kalmer, meanwhile, said she was thrilled to have improved her position after the Cape Town leg.
“I’m really happy with my race especially after finishing eighth in the Cape Town. A second for me feels like a win today so I’m really pleased,” she said.
“The race started really fast and I just decided to run my own race in a pace that I can manage.
“The goal was to finish in the top three and I’m very happy to have done that.”
The next race in the grand prix takes place in Durban on August 24.
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