Money in Panama

Panama’s official currency is the balboa. The rate of exchange for the balboa has always been tied to the US dollar—one dollar equals one balboa. Panama does not, however, print its own paper currency and instead uses the US dollar as legal tender. Panamanian coins come in 1, 5, 10, 25, and 50-cent pieces. They are the same size, color, and weight as U.S. coins and both are used frequently. While shopping or eating out, you may see prices with either a “$” or a “B/” before them, corresponding the dollars or balboas. They mean the same thing and have the same value.

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.

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.

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Taxes and Tipping

A ten percent tourism tax is added to the price of hotel rooms. There is also a 5 percent sales tax on all nonfood items and an airport departure tax of $40, although this is generally included in the price of a flight.

In most restaurants it’s typical to tip ten percent. Those who perform services – such as porters or private drivers – should also be tipped, although the amount can vary. Generally, anywhere between $0.25 and $1 is fine. You may also want to tip guides in more rural areas. Taxi drivers do not expect to be tipped.

Bargaining

Bargaining over prices is not widely practiced in Panama. You may be able to get a slight discount (descuento) on some items, including handicrafts, but it generally won’t be much. There can be a price reduction for buying more than one item, especially if you’re not buying retail. Ask whoever is selling the product if they’ll cut you a deal for buying two or more items.

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The amount of cash you should carry depends on what you plan to do. If you envision a day of eating at better restaurants, having drinks, and maybe even buying a souvenir, you’ll want $30-50 per person. However, if your hotel includes some meals and you’re only planning on lounging along the beach, $20 should cover it. ATMs are widely available in Panama (except in remote locations) and most of the time it isn’t hard to withdraw additional money. However, if you do pull out a sizeable amount of cash at once, it’s advisable to store it somewhere safe in your room and only bring out the amount you anticipate needing for that day.

By most standards, Panama is inexpensive. Those coming from North America or Europe will find Panama cheap, while South American or Central American travelers will find the prices comparable. That said, how much you spend here depends on how you want to travel. If you’re inclined towards upscale accommodations and fancier restaurants, your travel bill will be sizably larger than the budget traveler staying in dorm rooms and subsisting on street food. Even so, the most posh accommodations are still affordable by some standards.A typical breakfast (which often includes eggs and tortillas) will cost between $2-5. Lunch is similar, but may be a dollar or two more. The same goes for dinner. These prices are, however, for typical Panamanian food. Any meals catered towards tourists will be pricier and usually cost between $7-14. Buying a beer in a typical restaurant or bar will cost you $1-2, but nicer places can double or triple the amount. A bottle of water costs around $1 (tap water in Panama is generally clean, so buying water isn’t always necessary). Taxi rides are inexpensive and within most places shouldn’t be more than a few dollars, unless you’re going far. Small souvenirs go for under $10, larger ones for $20.

There is a US$40 tax for leaving the country, which is generally included in the price of a flight. There is also a ten percent tourism tax on all hotel bills and a general sales tax of seven percent.

Panama has a great number of handicrafts and souvenirs for travelers to purchase. Panama’s indigenous groups make some of the best souvenirs, including molas (handmade blouses), decorative baskets, carved tagua nuts, wooden figures, and beaded jewelry. Other popular souvenirs include coffee, paintings, t-shirts, and hats. There are street vendors in places like Panama City and Bocas del Toro, as well as small souvenir shops scattered across the country. However, don’t wait until the last minute to buy something — the Tocumen International Airport has very few options.

After eating at a restaurant, leave a ten percent tip. You should also tip people that provide you with some service, such as porters who carry your luggage. Most of the time it’s fine to tip between $0.50 and $2. Tipping a tour guide is at your discretion. Taxi drivers do not expect a tip.

Credit cards are accepted at some places in Panama. Upscale hotels and restaurants will usually accept credit cards, as will nicer stores, especially within larger cities. However, the further you get from an urban area, the less likely it is that credit cards will be an acceptable form of payment. Most small stores, supermarkets and restaurants only accept cash. Before traveling abroad, we recommended contacting your bank to let them know where you will be traveling. This way your bank won’t freeze your credit card when it sees transactions made in a foreign country. It is also advisable to check with your credit card company to see if there are additional charges for international transactions, including ATM fees.

Panama uses the dollar, so travelers coming from the United States will not need to change money. Travelers coming from other parts of the world will be able to exchange money in Panama City, most easily at the Tocumen International Airport. In other parts of Panama, changing money is a hassle. The easiest way to get dollars is to use your debit or credit card to pull cash out of an ATM.

By most standards, Panama is inexpensive. Those coming from North America or Europe will find Panama cheap, while South American or Central American travelers will find the prices comparable. That said, how much you spend here depends on how you want to travel. If you’re inclined towards upscale accommodations and fancier restaurants, your travel bill will be sizably larger than the budget traveler staying in dorm rooms and subsisting on street food. Even so, the most posh accommodations are still affordable by some standards.A typical breakfast (which often includes eggs and tortillas) will cost between $2-5. Lunch is similar, but may be a dollar or two more. The same goes for dinner. These prices are, however, for typical Panamanian food. Any meals catered towards tourists will be pricier and usually cost between $7-14. Buying a beer in a typical restaurant or bar will cost you $1-2, but nicer places can double or triple the amount. A bottle of water costs around $1 (tap water in Panama is generally clean, so buying water isn’t always necessary). Taxi rides are inexpensive and within most places shouldn’t be more than a few dollars, unless you’re going far. Small souvenirs go for under $10, larger ones for $20.

Most prices are non-negotiable. This is especially true in larger stores and urban environments. Travelers may, however, be able to get a slight discount on some things, including handicrafts. You may be able to get a cheaper price if you buy two or more of an item.

Traveler’s checks are not widely accepted in Panama and can be difficult to cash. For this reason, they are generally not worth the hassle. If you do decide to bring travelers checks, you may be able to cash them at banks. Anything other than American Express checks, however, may pose a problem.

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