Money in Panama

The similarities between the United States of America and Panama do not end at currency exchange. Panama's government is very similar to that of the United States, being a constitutional democracy consisting of a President and Vice President. Though the Panamanian economy is not extremely diverse, it is enjoying healthy growth.

A portrait of the Spanish explorer Vasco Núñez de Balboa is found on the heads of most coins, while the tails is always the shield of Panama. Only the one-cent piece has someone else—it’s Urracá, an indigenous chief who fought historical battles with the conquistadors.

How much cash should I carry in Panama?

For a typical day, plan on about US$30–50 per person in cash if you will eat at good restaurants, have drinks and pick up a souvenir; around US$20 is enough on days when meals are included and you are staying put at the beach. Panama uses the US dollar, so American travelers need no currency exchange, and ATMs are easy to find in Panama City and the main towns. Carry more, in small bills, before heading to Guna Yala (San Blas) or other remote spots, where cards are not accepted and there may be no ATM. Hotels, good restaurants and shops in the city take cards. If you withdraw a larger amount, keep it in your room safe and carry only what you need for the day. Your Panama Insider can tell you which stops on your itinerary are cash-only.

Practical Matters

The following information will help you know what to expect while budgeting, buying or bargaining in Panama.

Costs

Panama is not an expensive country, especially by North American or European standards. Prices can be slightly higher than other parts of Central America, but are usually cheaper than Costa Rica.

Food is generally inexpensive. Most restaurants throughout the country serve comida corriente (set meals) for $3 to $5, although nicer establishments can be in the $10 to $20 range. Buses and taxis are also fairly cheap and only cost a few dollars.

Hotels are reasonably priced. Budget accommodations tend to cost between $15 and $25. Midrange accommodations run $50-$100, while the best hotels are priced between $100-$200 a night. Double rooms often aren’t much more expensive than single rooms. Sharing a room can significantly lower the cost of travel.

Banks and ATMs

You might want to use cash when traveling in smaller towns and for day-to-day dealings such as food and tours and activities . There are banks located throughout the country that are open Monday through Saturday. During the workweek, banks are usually open from 8 AM to 3 PM, although they tend to have shorter hours on Saturday. ATMs are equally available and are definitely the easiest way to get cash – just look for the red signs that say Sistema Clave. ATMs generally accept most types of credit and debit cards (Visa, MasterCard, Amex, Cirrus, Plus) and will charge a service fee, usually around $5. The amount that you can withdrawal at one time depends on the bank, though it’s typically around $500.

Changing Money

If you’re coming from the United States, you won’t need to exchange money—the dollar is legal tender in Panamanian currency. Changing other foreign currencies can be difficult in Panama. You can exchange money at the Banco Nacional de Panamá in the airport. However, outside of the airport the only place you can exchange foreign currency is at a casa de cambio (exchange house). These can be difficult to find outside of Panama City .

Credit Cards

Credit cards are often accepted in the cities, especially at nicer hotels, restaurants and stores. Smaller hotels and restaurants, however, will generally only take cash, as will taxis. The farther one gets from a city, the more difficult it is to use a credit card. Visa and MasterCard are the most widely accepted credit cards, although other cards can often be used in upscale establishments.

There are some parts of Panama where it’s impossible to use credit cards, including the Comarca de Guna Yala (the San Blas Islands) and other remote areas. It’s important to bring cash to these places and to have small bills, as larger denominations are hard to break. Some of these destinations won’t have banks or ATMs either.

Traveler's Checks

Travelers checks are rarely accepted by businesses in Panama. Banks put a 45-day hold on the checks before the merchants' account is credited, so most businesses prefer to keep things simple and not accept them. Travelers checks can be cashed at some banks, although many banks will only cash American Express checks. The banks that do accept travelers checks will often charge an exchange fee—usually it’s around 1 percent of the check.

In general, travelers checks are more of hassle than they are worth. ATMs are accessible throughout Panama and are by far the simplest way to get money.

Taxes in Panama

Panama's sales tax, the ITBMS, is 7% on most goods and services. Hotel and other lodging stays are charged 10% ITBMS, as are alcoholic drinks, and tobacco products carry 15%. Airport departure charges are collected in the price of your airline ticket, so there is nothing to pay at the airport.

How much should you tip in Panama?

Tip about 10% at sit-down restaurants, but check the bill first: some restaurants already add a service charge (propina or servicio), and you don't need to pay it twice. Beyond restaurants:

• Porters and bellhops: US$0.50–2 per bag
• Private drivers and naturalist guides: tip for good service, more for a full day than for a short transfer
• Taxi drivers: no tip expected; rounding up is appreciated

Tipping is always your choice, but service wages in Panama are modest, so a tip is a meaningful part of many workers' income. Carry small bills: they are easier to hand over and larger notes can be hard to break outside the city.

Can you bargain in Panama?

Rarely. Prices in shops, malls and restaurants are fixed, especially in Panama City and other urban areas. At craft markets and with independent artisans, for example Guna molas or Emberá baskets and carvings, you can politely ask for a small discount (descuento), and buying two or more pieces is the easiest way to get one. Keep it light: for many indigenous artisans, craft sales are a main source of income.

For duty-free shopping, Panama has two options: Tocumen International Airport and the city of Colón.