The term 'PANAMA PAL' is a combination of two words, 'PANAMA' and 'PAL'. PANAMA is a country located in Central America, bordered by Costa Rica to the west, Colombia to the southeast, the Caribbean Sea to the north, and the Pacific Ocean to the south. The word 'PAL' is a slang term for a close friend or companion. Therefore, the term 'PANAMA PAL' can be interpreted as a close friend from PANAMA. The crossword solution for this term is 'AMIGO', which is the Spanish word for friend.