Panama Beach is located in Ampara district about 17km from Pottuvil. It is one of the most beautiful pristine beaches in the Eastern province because of the sand dunes stretching along the beach and the picturesque pink rocks of Panama at the distant end of the beach. The pink rocks glow pinkish when they bathe in the evening sunlight. The beach is covered with exquisite marine plant life, besides, monkeys can be occasionally seen here.