The capital of Panama is Panama City, which is also known as PEE. Panama City is the largest city in the country and is located at the Pacific entrance of the Panama Canal. It is a major financial center and has a population of over 1.5 million people. The city is home to many important government buildings, including the Presidential Palace and the National Assembly. It is also a popular tourist destination, with its beautiful beaches, vibrant nightlife, and historic sites.