Abstract Seasonal streamflow forecasts contingent on climate information are essential for water resources planning and management as well as for setting up contingency measures during extreme years. In this study, operational streamflow forecasts are developed for a reservoir system in the Philippines using ECHAM4.5 precipitation forecasts (EPF) obtained using persisted sea surface temperature (SST) scenarios. Diagnostic analyses on SST conditions show that the tropical SSTs influence the streamflow during extreme years, whereas the local SSTs (0°–25°N, 115°–130°E) account for streamflow variability during normal years. Given that the EPF, local, and tropical SST conditions are spatially correlated, principal components regression (PCR) is employed to downscale the GCM-predicted precipitation fields and SST anomalies to monthly streamflow forecasts and to update them every month within the season using the updated EPF and SST conditions. These updated forecasts improve the prediction of monthly streamflows within the season in comparison to the skill of the monthly streamflow forecasts issued at the beginning of the season. It is also shown that the streamflow forecasting model developed using EPF under persisted SST conditions performs well upon employing EPF obtained under predicted SSTs as predictor. This has potential implications in the development of operational streamflow forecasts and statistical downscaling, which requires adequate years of retrospective GCM forecasts for recalibration. Finally, the study also shows that predicting the seasonal streamflow using the monthly precipitation forecasts reproduces the observed seasonal total better than the conventional approach of using seasonal precipitation forecasts to predict the seasonal streamflow.