The world and European champions eased into a 3-0 half-time lead in sultry Panama City thanks to Pedro's double and a goal from record scorer and stand-in captain David Villa, his 53rd on his 85th appearance for his country.
Playing their final match of 2012 and without rested midfield stalwarts Xavi and Xabi Alonso, Vicente del Bosque's side missed a host of chances before substitute Sergio Ramos curled in a superb free-kick in the 82nd minute.
"The balance between order and talent gave us the edge," Del Bosque told a news conference. "We took the game seriously, with a certain level of commitment, and our domination of the ball did not allow them many chances.
"We could have scored more goals in the second half but we made it easy for ourselves."
The match at the Rommel Fernandez Stadium between the world's number one nation and 46th-ranked Panama seemed at times like a training match for the laid-back Spanish and Del Bosque was able to try out a couple of players who are on the fringes of the squad.
Iniesta danced into the penalty area to set up Villa, another Barca player, in the 29th and Juan Mata sent Pedro clear for his second and Spain's third two minutes before half-time.
It looked initially as if Fabregas was going to take the free-kick that led to Spain's fourth but Ramos ran up and sent the ball arrowing past Penedo into the top corner.
"We played well, it was a good spectacle and we are returning to Spain feeling content," Mata told reporters.
"They are still in with a chance of qualifying for the World Cup and the weather conditions were not the best for us but we performed well," the Chelsea midfielder added.
Spain's latest victory means they end 2012 with 13 wins and three draws, including the semi-final of Euro 2012 when their match against Portugal finished 0-0 after extra time and Spain went through to the final after a penalty shootout.
