Currency & Money in Panama

Currency & Money in Panama

Understanding Panama’s Currency

The Dual Currency System: Balboa & US Dollar

• Panama’s official currency is the Panamanian Balboa (PAB).
• Crucially, the Balboa is pegged to the US Dollar at a 1:1 ratio.
• The US Dollar is legal tender and is used for all paper money transactions. You will not see or use paper Balboas.
• The Balboa exists only in coin form, which is identical in size and value to US coins (penny, nickel, dime, quarter). You will receive Balboa coins as change.

For all practical purposes, you can simply think in US Dollars throughout your trip. The system is designed for simplicity; Balboa coins and US coins are used interchangeably without a second thought.

Using Your Coins

• You will accumulate Balboa coins during your trip as you make cash purchases.
• It is best to spend these coins before you leave Panama, as they are very difficult to exchange back home at banks or currency exchange offices.

Cash, Credit, or Debit?

Using Cash (US Dollars)

Best Bills to Carry: We recommend bringing clean, untorn US bills in small denominations ($1, $5, $10, and $20). These are easy to use everywhere.

Large Bills ($50 & $100): These can be difficult to use, especially at small shops, local restaurants, and in rural areas. Many businesses are hesitant to accept them due to concerns about counterfeit currency. We advise breaking larger bills at a major bank or a large, modern supermarket shortly after you arrive.

When Cash is King: Cash is essential for many daily transactions. Be sure to have it on hand for:

• Taxis
• Local markets and street food vendors
• Small family-run restaurants, known as fondas
• Tours and activities in remote areas (e.g., San Blas Islands)
• Tips for guides, drivers, and hotel staff

Using Credit & Debit Cards

• Card Acceptance: Visa and Mastercard are widely accepted in mid-to-high-end hotels, restaurants, and large stores in cities like Panama City, Boquete, and Bocas del Toro town.
• Less Common Cards: American Express and Discover are accepted much less frequently, so it is wise to have a Visa or Mastercard as your primary card.
• IMPORTANT: Notify Your Bank: Before you depart, inform your bank and credit card companies of your travel dates and destinations. This simple step helps prevent your cards from being blocked due to automated fraud-prevention systems.
• Dynamic Currency Conversion (DCC): If a payment terminal gives you the option to pay in your home currency or in USD, always choose USD. Your home bank will provide a more favorable exchange rate than the one offered by the terminal.

Accessing Your Money: ATMs

ATM Availability

• ATMs, or cajeros automáticos, are readily available in cities, airports, and larger towns.
• In remote regions, on islands like the San Blas archipelago, and in small villages, ATMs are often scarce or non-existent.

We strongly advise you to withdraw sufficient cash before traveling to these more remote destinations to cover your anticipated expenses.

Fees & Withdrawal Limits

• Expect to pay a fee to the local Panamanian bank for each transaction, typically between $5 and $7.
• Your home bank will likely charge its own foreign transaction and/or ATM fee in addition to the local bank’s charge.
• Most ATMs have a daily withdrawal limit, which is often between $250 and $500 per transaction.

Tipping Etiquette in Panama

Restaurants & Cafes

• A tip of 10% is standard for good service in restaurants.
• Always check your bill first. Some establishments, particularly in tourist-heavy areas, may automatically add a 10% service charge, often listed as servicio or propina. If this charge is included, no additional tip is necessary unless you received truly exceptional service.

Tour Guides & Drivers

• Tour Guides: For a full-day tour, a tip of $10-$20 per person is a good guideline to show appreciation for a knowledgeable guide.
• Private Drivers: For a driver hired for a full day, $10-$20 is appropriate. For shorter airport or hotel transfers, a few dollars is a welcome gesture.

Hotel Staff

• Porters/Bellhops: $1-$2 per bag is customary.
• Housekeeping: $2-$3 per day, left on the pillow or nightstand, is a thoughtful way to thank the staff.

Taxis

• Tipping is not a standard custom for taxi drivers in Panama.
• However, rounding up the fare to the nearest dollar is a common and appreciated gesture.

Typical Costs & Budgeting

Sample Prices

To help you plan, here is a guideline of approximate costs for common items. Prices can vary based on location and establishment.

• National Beer (Balboa, Atlas): $1.50 – $3.00
• Cup of local coffee: $2.00 – $4.00
• Lunch at a fonda (local eatery): $5 – $8
• Dinner at a mid-range restaurant: $15 – $30 per person
• Short taxi ride within Panama City: $3 – $7

Bargaining

• Bargaining is generally only practiced and acceptable at artisan and craft markets.
• It is not appropriate in supermarkets, boutiques, formal shops, or restaurants.
• When you do bargain, maintain a polite and friendly demeanor. The goal is typically a small, reasonable discount rather than a drastic price reduction.