Panama is a coastal village in the Eastern Province of Sri Lanka, located 126 kilometres (78 mi) south of Batticaloa and 12 km (7.5 mi) south of Arugam Bay. It is the last populated settlement in the southernmost part of the province, within the Ampara District. Kumana Bird Sanctuary and Heritage park starts southwards from Panama.

Panama was the capital of the Colonial Panamapattuwa of Mattakkalappu Desam. This ancient village can be seen in the historical maps of Portuguese and Dutch as Panao, Panova, and Paneme. Panama's inhabitants are mixed people of Sinhalese and Tamils. Panama is known for its Pattini Cult.

The village's name has been a cause for mix-up by Sri Lanka Post resulting in local mail being wrongly redirected to the Central American nation of Panama and vice versa for international mail.

About Ampara District

Ampara is belongs to the Eastern Province. of Sri Lanka It is a remote city on the East Coast of Sri Lanka, about 360 km from the capital city of Colombo.Ampara is the largest paddy harvesting province in the country, and has the Indian Ocean on the east coast of Sri Lanka as a fisheries resource. Most of the civilians are Sinhala, while Tamils and Moors also live in the coastal parts of the district.

About Eastern Province

The Eastern Province is one of the 9 provinces of Sri Lanka. The provinces have existed since the 19th century but they didn't have any legal status until 1987 when the 13th Amendment to the 1978 Constitution of Sri Lanka established provincial councils. Between 1988 and 2006 the province was temporarily merged with the Northern Province to form the North-East Province. The capital of the province is Trincomalee. The Eastern Province's population was 1,460,939 in 2007. The province is the most diverse in Sri Lanka, both ethnically and religiously.

Eastern Province has an area of 9,996 square kilometers (3,859.5 sq mi).The province is surrounded by the Northern Province to the north, the Bay of Bengal to the east, the Southern Province to the south, and the Uva, Central and North Central provinces to the west. The province's coast is dominated by lagoons, the largest being Batticaloa lagoon, Kokkilai lagoon, Upaar Lagoon and Ullackalie Lagoon.