The Navy retained the name carried by the first Panay at the time of her acquisition; the second Panay was named for the island in the Philippine Archipelago.
(Gunboat: displacement 162; length 94'10"; beam 18'2"; draft 6'3"; speed 8 knots; complement 27; armament 1 6-pounder, 2 1-pounders)
The gunboat Panay was laid down for the Spanish Navy in 1884 by Cavite Navy Yard and completed in 1885. The U.S. Army, upon the American occupation of the Philippines following the war with Spain, acquired the warship. Transferred to the U.S. Navy in 1899, she was commissioned 3 June 1899, Ens. Harris Laning in command.
Throughout the Philippine Insurrection, Panay served on blockade and patrol duty, intercepting contraband and aiding the Army on Mindanao, Leyte, Cebu, Samar, and Negros. Decommissioned at Cavite on 7 August 1902, she underwent a period of repairs, after which she was recommissioned on 12 January 1907, Midshipman (Ens. from 2 February 1907) Chester W. Nimitz in command.
Assigned to patrol Mindanao, Nimitz took Panay, his first command, into many of the small ports to "show the flag." He also commanded the naval station at Polloc. Returning to Cavite in July 1907, Nimitz and his men were assigned to recommission Decatur (Destroyer No.5), Panay went into reserve, being decommissioned on 5 October 1907.
Panay then served as a yardcraft at Olongapo and Cavite and ferried passengers between Cavite and Manila in the years that followed, even after she was stricken from the Navy List on 19 June 1914. She was sold on 15 April 1920.