Panama City, the capital and largest metropolis of Panama, is a dynamic hub of politics, commerce, and banking. With a population exceeding 1 million and over 2.1 million residents in its urban area, the city is strategically positioned at the Pacific entrance of the Panama Canal, serving as a key gateway for global trade.

Founded on August 15, 1519, by Spanish conquistador Pedro Arias Dávila, Panama City played a pivotal role in Spain’s colonial expansion. It was the launching point for expeditions that led to the conquest of the Inca Empire in Peru and became a crucial link in the transcontinental trade route. Gold and silver mined from the Americas flowed through the city en route to the trade fairs of Nombre de Dios and Portobelo, making it one of the most significant economic centers of the era.

Country	Panama
Province	Panamá Province
District	Panamá District
Foundation	15 August 1519
Founded by	Pedro Arias de Ávila
• Mayor	Mayer Mizrachi (Independent)
• Capital city	2,082 km2 (804 sq mi)
• Metro	2,560.8 km2 (988.7 sq mi)
Elevation	2 m (7 ft)
Population  • Capital city	1,086,990
• Density	520/km2 (1,400/sq mi)
• Urban	2,100,189
• Year	2023
• Total	$65.8 billion
• Per capita	$33,300
Time zone	UTC−05:00 (EST)
Area code(s)	(+507) 2, 3
HDI (2017)	0.820 –
Website	MuPa.gob.pa

However, on January 28, 1671, the city was devastated when privateer Henry Morgan led a raid, setting it ablaze. The ruins of this original settlement, now known as Panamá Viejo, remain a UNESCO World Heritage Site and a popular tourist destination. Two years after its destruction, the city was rebuilt on a more defensible peninsula, approximately 8 kilometers (5 miles) from its original location, where it continues to thrive as a modern capital with deep historical roots.

History of Panama City

Colonial Era and Early Development

Panama City was founded on August 15, 1519, by Spanish conquistador Pedro Arias de Ávila, also known as Pedrarias Dávila. Shortly after its establishment, the city became a crucial launching point for Spanish expeditions, including the conquest of the Inca Empire in Peru. It also served as a transit hub for gold and silver shipments from the Americas to Spain.

By 1520, Genoese merchants controlled much of the port's commerce, particularly in the slave trade, through a concession granted by Spain. The city also played a role in early global trade, where Spanish and Genoese traders encountered coconuts from the Philippines, introduced by Malayo-Polynesians before Spanish colonization.

Destruction and Relocation

In 1671, the infamous privateer Henry Morgan led an attack on Panama City, looting and setting it ablaze. Following the destruction, the city was relocated in 1673, approximately 8 km (5 miles) southwest of its original site. The ruins of the original city, known as Panamá Viejo, remain a UNESCO World Heritage Site and a popular historical attraction today. The relocated settlement became known as Casco Viejo, now a historic district within modern Panama City.

19th-Century Growth and the Panama Railroad

In response to increasing global trade, particularly with the discovery of gold in California, the Panama Railroad Company was established in 1849. Although construction was delayed, the railroad became fully operational in 1855, facilitating the movement of hundreds of thousands of people across the isthmus between the Atlantic and Pacific Oceans. This surge in traffic significantly contributed to Panama City's economic prosperity during the mid-19th century.

Independence and the Panama Canal

Following Panama’s declaration of independence from Colombia on November 3, 1903, Philippe Bunau-Varilla, a French engineer, played a pivotal role in negotiating the Hay-Bunau-Varilla Treaty. This agreement granted the United States a 10-mile-wide strip of land for the construction of the Panama Canal. In exchange, Panama received a one-time payment of $10 million and an annual annuity of $250,000, with the U.S. guaranteeing Panama’s sovereignty.

The construction of the Panama Canal, completed in 1914, transformed global trade and symbolized American engineering prowess. The U.S. presence in the Canal Zone also brought significant improvements in health and sanitation. Dr. William Gorgas, the chief sanitary officer, implemented large-scale mosquito control measures, effectively eliminating yellow fever and drastically reducing malaria rates. However, the influx of Caribbean laborers for canal construction led to increased racial and social tensions in the city.

World War II and Post-War Expansion

During World War II, Panama City experienced a surge in prosperity due to the construction of military bases and the arrival of U.S. military and civilian personnel. However, tensions arose between Panamanians and Americans residing in the Canal Zone, culminating in the Martyrs' Day events on January 9, 1964.

By the late 1970s and 1980s, Panama City had become a major international banking hub, attracting attention as a center for money laundering. In 1989, following increasing tensions between the U.S. and Panama, President George H.W. Bush ordered the U.S. invasion of Panama to overthrow General Manuel Noriega. The conflict resulted in significant destruction, particularly in the El Chorrillo neighborhood, where historic wooden structures dating back to the early 1900s were lost.

Modern Era and the Panama Canal Transfer

On December 31, 1999, the United States formally transferred control of the Panama Canal to Panama, marking a significant moment in the country's history. Today, Panama City remains a thriving financial hub, with strict regulations on cash flow. Major shipping operations are managed through the Balboa port, now operated by Hutchison Whampoa, and additional ports on the Caribbean side of the isthmus.

The city continues to evolve as a global financial and trade center, balancing its historical legacy with modern economic growth.

Geography

Panama City is situated between the Pacific Ocean and tropical rainforests in the northern part of Panama. The Parque Natural Metropolitano (Metropolitan Nature Park) extends from Panama City along the Panama Canal and is home to unique bird species and other wildlife, including tapirs, pumas, and caimans. At the Pacific entrance of the canal lies the Centro de Exhibiciones Marinas (Marine Exhibitions Center), a research facility managed by the Smithsonian Tropical Research Institute, which focuses on tropical marine life and ecology.

The tropical forests surrounding Panama are essential to the operation of the Panama Canal, providing the necessary water supply. Due to the canal's economic significance, these forests have remained largely untouched, making the canal a rare example of a major engineering project that contributes to forest preservation. On the western side of the canal, the Parque Nacional Soberanía (Sovereignty National Park) houses the Summit Botanical Gardens and a zoo. The park's most famous trail, Pipeline Road, is particularly popular among birdwatchers.

Nearly 500 rivers traverse Panama's rugged terrain, most of which are unnavigable. Some originate as swift highland streams before winding through valleys to form coastal deltas. The Río Chepo and the Río Chagres, both within Panama City's boundaries, serve as sources of hydroelectric power. The Río Chagres, one of the longest and most vital rivers flowing into the Caribbean, was dammed to create Gatun Lake, forming a key part of the Panama Canal's transit route. Additionally, both Gatun Lake and Madden Lake (also fed by the Río Chagres) provide hydroelectric power to the former Canal Zone area. The Río Chepo, one of over 300 rivers emptying into the Pacific, is another major hydroelectric power source.

Climate

Panama City has a tropical savanna climate , which is slightly drier than a tropical monsoon climate. The city receives an annual precipitation of approximately 1,900 mm (74.8 in). The wet season lasts from May through December, while the dry season occurs from January through April. Temperatures remain relatively constant throughout the year, averaging around 27 °C (81 °F). Due to its location in the Intertropical Convergence Zone, Panama experiences frequent cloud cover, even during the dry season.

Cityscape

Panama City's architectural landscape is a blend of historic and modern styles. The old quarter, Casco Viejo, showcases Spanish colonial buildings alongside French and Antillean townhouses constructed during the Panama Canal's development. In contrast, the city's contemporary districts are characterized by numerous high-rise buildings, making it one of the densest skylines in the world. More than 110 high-rise projects are currently under construction, with 127 already completed, ranking the city 45th worldwide in terms of skyscraper count.

The Centennial Bridge, which spans the Panama Canal, has been recognized with the American Segmental Bridge Institute's prize for excellence, along with seven other bridges across the Americas.

Neighborhoods

Panama City is located within Panama District, but its metropolitan area includes settlements on both sides of the Panama Canal. The city is divided into corregimientos (administrative divisions), which contain various boroughs. The historic Casco Viejo is part of the corregimiento of San Felipe.

The city's urban core consists of San Felipe and twelve other corregimientos:

• Santa Ana
• El Chorrillo
• Calidonia
• Curundú
• Ancón
• Bella Vista
• Bethania
• San Francisco
• Juan Diaz
• Pueblo Nuevo
• Parque Lefevre
• Río Abajo

Economy

Panama City serves as the country's economic and financial hub, with an economy centered on banking, commerce, and tourism. Trade and shipping activities related to the Panama Canal, along with port facilities in Balboa, play a crucial role in economic development. The city's strategic position as a global financial center has established it as a prime location for offshore banking and tax planning, attracting multinational corporations that rely on legal and financial services.

The city generates approximately 55% of Panama's GDP, as most businesses and commercial premises are located within its metropolitan area. Additionally, it serves as a major transit point and tourist destination.

Tourism has become a significant economic driver, particularly following the transfer of the Panama Canal Zone at the end of the 20th century. The hotel industry expanded from 1,400 rooms in 1997 to over 15,000 rooms by 2013, with annual visitor numbers increasing from 457,000 in 1999 to 1.4 million in 2011. In 2008, Panama City had the second-highest hotel occupancy rate outside the United States, following Perth, Australia, and preceding Dubai. However, occupancy rates have declined since 2009 due to the rapid growth in the number of luxury hotels.

Several international hotel chains, including Marriott, Sheraton, InterContinental, Le Méridien, Radisson, and RIU, have established a presence in the city. The Trump Organization's first investment in Latin America, the Trump Ocean Club, was built in 2006 and was the tallest building in the city until it was renamed The Bahia Grand Panama in 2018 due to declining occupancy rates associated with the Trump brand. Today, the property is managed by JW Marriott. Hilton Worldwide has also expanded in the city, with a Hilton Garden Inn in El Cangrejo and The Panamera, the second Waldorf Astoria Hotel in Latin America, opened in 2013.

Land reclamation projects have facilitated the development of highways, housing, and parkland, including Cinta Costera, a major waterfront boulevard.

Demographics

Panama City has a population of approximately 1,086,990 residents spread across 26 boroughs. The city's inhabitants, commonly referred to as "capitalinos", represent a diverse mix of ethnicities:

• Mestizos (70%)
• Amerindian and mixed West Indian descent (14%)
• White (10%)
• Amerindians (6%)
• Significant Afro-Panamanian population

Panama City is a culturally diverse metropolis where multiple languages are spoken, including German, Portuguese, French, Arabic, Chinese, Hebrew, and English, alongside Spanish.

Culture

World Heritage Sites

Panamá Viejo

Panamá Viejo ("Old Panama") refers to the architectural remains of the first Spanish city founded on the Pacific coast of the Americas by Pedro Arias de Ávila on August 15, 1519. This city played a crucial role in the conquest of the Inca Empire in Peru in 1532 and served as a key stopover on a major trade route through which Spain transported vast amounts of gold and silver from the Americas.

Casco Viejo (Casco Antiguo)

Following the destruction of Panamá Viejo by the privateer Henry Morgan in 1671, the historic district of Panama City—known as Casco Viejo, Casco Antiguo, or San Felipe—was established as a walled city to protect against future pirate attacks. It was designated a UNESCO World Heritage Site in 2003.

Casco Viejo showcases diverse architectural styles, including Caribbean, Republican, Art Deco, French, and colonial influences. Notable landmarks include the Salón Bolívar, National Theater, Las Bóvedas, Plaza de Francia, Metropolitan Cathedral, and St. Joseph Church, which houses the famous golden altar saved from Panamá Viejo.

Cinta Costera 3

Casco Viejo has undergone redevelopment and gentrification, making it a prime tourist destination. In 2014, President Ricardo Martinelli constructed an extension of the Cinta Costera maritime highway, named "Cinta Costera 3," around the historic district. While initially controversial, concerns about Casco Viejo losing its World Heritage status were eventually dismissed by UNESCO.

Literature

Panama’s literary history dates back to 1535, with Gonzalo Fernández de Oviedo y Valdés’ Historia General y Natural de Las Indias. Renowned Panamanian authors include Ricardo Miró, Amelia Denis de Icaza, Gaspar Octavio Hernández, Rosa María Britton, Juan David Morgan, and Carlos Oriel Wynter Melo, among many others.

Art

Prominent Panamanian artists include Alfredo Sinclair, known for his abstract art, and his daughter Olga Sinclair, who has also made a significant impact. Other renowned artists include Guillermo Trujillo (abstract surrealism), Brooke Alfaro (unique oil paintings), and Mario Calvit, a key figure in Panamanian painting from the 1950s to the 1970s.

Tourism

Historic Sites & Attractions

• Las Bóvedas – A waterfront promenade with scenic views of the Pacific.
• Plaza de la Catedral & Metropolitan Cathedral – Central historical landmarks.
• National Theatre of Panama – An intimate venue with exceptional acoustics.
• Interoceanic Canal Museum – A museum dedicated to the history of the Panama Canal.
• Palacio de las Garzas – The presidential palace, named after the herons inhabiting the building.
• Miraflores Visitors Center – A museum and ship simulator near the Panama Canal.
• Amador Causeway – A land bridge built from canal excavation rocks, now a major tourist area.
• Biomuseo – Designed by Frank Gehry, this museum highlights Panama’s biodiversity.

Hotels & Nightlife

Panama City offers diverse accommodations, from luxury hotels like the Waldorf Astoria to boutique-style lodgings. Nightlife is centered around Calle Uruguay and Casco Viejo, featuring bars and nightclubs catering to tourists.

Safety & Travel Advisory

The U.S. State Department warns visitors about crime risks, including armed robbery and kidnapping. Tourists are also advised against purchasing counterfeit goods, which may violate local laws. While same-sex marriage is not legally recognized, anti-discrimination laws protect the LGBTQ+ community.

Sports

Popular Sports & Athletes

Panama City has a strong sporting culture, excelling in boxing, baseball, basketball, and soccer. Notable athletes include:

• Roberto Durán (boxing)
• Mariano Rivera & Rod Carew (baseball)
• Rommel Fernández, Julio Dely Valdés (soccer)
• Rolando Blackman (basketball)

Soccer Clubs

Top-League Teams:

• Alianza
• Chorrillo
• Plaza Amador
• Tauro
• Chepo
• San Francisco F.C.

Second Division (Liga Nacional de Ascenso):

• Atlético Nacional
• Deportivo Genesis
• Millenium
• Río Abajo

Major Sports Venues

• Rod Carew Stadium – 27,000 capacity
• Rommel Fernández Stadium – 32,000 capacity
• Roberto Durán Arena – 18,000 capacity

Education

Primary & Secondary Schools

Panama City has both public and private schools, with many private institutions offering bilingual (English-Spanish) education.

Higher Education

The city is home to major universities, including:

Public Universities:

• University of Panama
• Technological University of Panama

Private Universities:

• Universidad Católica Santa María La Antigua
• Universidad Latina de Panama
• Universidad Latinoamericana de Ciencia y Tecnología (ULACIT)

International Branches:

• Florida State University
• University of Louisville
• University of Oklahoma

Healthcare

Major Hospitals & Medical Facilities

Panama City has an extensive network of hospitals, including:

• Hospital Santo Tomás
• Hospital del Niño
• Complejo Hospitalario Arnulfo Arias Madrid
• Centro Médico Paitilla
• Hospital Nacional
• Hospital Punta Pacífica

Approximately 45% of Panama’s doctors are based in the capital.

Transportation

Airports

• Tocumen International Airport – Panama’s main airport, handling international flights.
• Panamá Pacífico Airport – Serves low-cost airline Wingo.
• Marcos A. Gelabert Airport – Hub for AirPanama.

Panama Metro

The city’s rapid transit system connects northern and eastern Panama City to the center. Two lines are operational, with a third under construction.

Traffic & Road Transport

Panama City faces frequent traffic congestion due to a high number of private vehicles. The Panama Metro was introduced in 2014 to alleviate traffic. The city also has a central bus terminal in Ancón, serving domestic and international routes.

Taxis & Ride-Sharing Services

Taxis operate under a fixed zone-based fare system rather than meters. Popular ride-sharing services include Uber, InDriver, and Cabify, though Uber has faced opposition from local taxi drivers.

References