The SS Panay is Sipalay's most famous dive site: a well-preserved World War II passenger-cargo ship that was torpedoed by a Japanese submarine in 1942 and now rests on a sandy bottom at around 28 metres. The wreck is largely intact, with the structure still recognisable and the interior accessible to experienced divers. Gas masks remain in the stock rooms, and the holds give a vivid sense of the ship's wartime role.
The wreck is covered in soft corals and attracts dense populations of reef fish. On good days, larger groupers and snappers shelter in the hull. The depth makes this a dive for certified divers; a divemaster guide is advisable for those who have not dived wrecks before. Most Sipalay dive operators include the Panay in their multi-site day trips.