Latin American ladies (and Panamanians are not an exception) like to follow a dress code for every event they go to, even if it is a daily trip to the supermarket. And this code works for men, as well.
Outside, in the street, you see "blue collar" general citizens well dressed, but not necessarily expensively, because one of the good things about Panama is that you can get casual clothing, shoes and accessories at ridiculously low prices everywhere in the stores and malls.
On the other hand, if you prefer brand names, hundreds of the latest fashion stores and malls are offered through out the city.
Panamanians are very conscientious of fashion....there is the "Panamá fashion week" in which famous designers from all over the world concentrate here for a fashion show once a year.
Ladies in Panama wear long pants and formal blouses to go for a "coffee", dinner or a movie. They wear dresses for church or any other event, as well as nice pants suits. Even the shorts are nice, and they wear them with very nice shoes or sandals, never "flip flops" or anything sloppy.
Most foreigners usually wear shorts, or simple dresses, sneakers and hats. Lately, Panamanians are starting to wear shorts to go to the malls.
For formal events, there is a competition in fashion. All weddings are formal, and the dresses worn are expensive.