Lonely Planet review
Following the destruction of the old city by Henry Morgan in 1671, the Spanish moved their city 8km southwest to a rocky peninsula on the foot of Cerro Ancón. The new location was easier to defend as the reefs prevented ships from approaching the city except at high tide. The new city was also easy to defend as it was surrounded by a massive wall, which is how Casco Viejo got its name.
In 1904, when construction began on the Panama Canal, all of Panama City existed where Casco Viejo stands today. However, as population growth and urban expansion pushed the boundaries of Panama City further east, the city's elite abandoned Casco Viejo, and the neighborhood rapidly deteriorated into an urban slum.
Today, Casco Viejo is gradually being gentrified, and the buildings that have already been restored give a sense of how magnificent the area must have looked in past years. Recognition of these efforts by the international community resulted in the area being declared a UNESCO World Heritage Site in 2003. However, part of the allure of strolling along Casco Viejo's cobbled streets is the dilapidated charm of the crumbling buildings, abandoned houses and boarded-up ruins.
The restoration of Casco Viejo is still a work in progress, so please be aware of your surroundings and exercise caution while exploring this fascinating neighborhood.