Panama City has two seasons: dry and wet. The dry season runs from mid-December through April, bringing reliable sunshine, manageable heat, lower humidity, and the best conditions for birding and outdoor activity. This is also peak season for canal transits, which means more ships visible in the locks and more ships queued offshore at the Pacific entrance. Prices and visitor numbers are higher during this period.
The wet season (May to November) brings daily afternoon rain — typically a heavy downpour of an hour or two rather than all-day grey — followed by sunshine. The city functions normally; the rain is more predictable than disruptive, and it is genuinely cheaper and less crowded. The Casco Viejo looks particularly good in the wet season: the colonial buildings are darker and more dramatic, and the vegetation is intensely green.
The Christmas–New Year week and Carnival (the four days before Ash Wednesday, usually February or March) are the city's two busiest periods. Carnival in Panama City is a major event — street parties, culecos (water-truck floats), and several days of genuine festivity. Book accommodation months ahead for both periods.
For birding on the Pipeline Road, the dry season is optimal (leaf drop means better visibility in the canopy) but the wet season is also productive, with different species present. There is no bad time to visit Panama City; the main variable is how often and how hard it rains.