Hostel Palacios is conveniently located directly on the upper end of the main plaza. It is inside older building which opens onto nice garden in the back. It has private rooms with bathrooms, dorms with shared bathrooms, decent size kitchen, living room with TV and free Wi-Fi. There is hot water.
You will share this hostel not only with fellow travelers, but also with the owners’ family who lives there. It can get a bit noisy during the day, but it is quiet at night.
The owner is a good source of information about local activities, specifically information about hike to Volcan Baru. If you are in Boquete, you should not miss this hike. It is best hiked at night during full moon and reaching the peak before sunrise.
Although the hostel is generally clean and provides decent budget accommodation, the building is quite old.
If you are arriving to Boquete during high season you should make reservation for your accommodation in advance. I arrived to Boquete in late afternoon and this hostel was the first with vacancy, only after at least seven other hostels I went to that were fully occupied.