Panamá is located in the Meia Ponte Microregion and is about 25 kilometers north of the border with the state of Minas Gerais.

It is a short distance west of the important BR-153 highway which links São Paulo to Belém.

Neighboring municipalities are: Panamá began with the building of a chapel by a local landowner.

The economy is based on agriculture, cattle raising, services, public administration, and small transformation industries.

The United Nations Human Development Index (2000) ranked Panamá 131 out of 242 municipalities in the state of Goiás with a score of 0.733.