Both are useful for storing working data. But they work in very different ways.

Collections

- Can use bulk processing (forall)
- Useful for returning arrays to the client
- Size limited by memory

Temporary tables

- Works like a normal table in SQL
- Can create indexes on the table
- Modifying the contents generates undo/redo
- Size limited by disk

There are improvements to temporary tables in 12c, notably session private stats:

https://oracle-base.com/articles/12c/session-private-statistics-for-global-temporary-tables-12cr1

and temporary undo:

https://oracle-base.com/articles/12c/temporary-undo-12cr1

There are also improvements to collections in 12c. For example, you can now use associative arrays in SQL with the table() operator:

http://www.oraclefrontovik.com/2014/08/using-sql-with-associative-arrays-of-records-in-oracle-12c/

Which is better ultimately depends upon what you're doing.

Mostly doing PL/SQL processing on your data? Collections are a better bet.
Plan on using the data in SQL? Temporary tables may be the way to go.

Which performs better varies case-by-case. Build a test case for your situation and try it out!

Note that collections come in three flavours:

- Associative arrays
- Nested tables
- Varrays

Each of these has their own pros and cons. The documentation gives a thorough rundown of these differences:

http://docs.oracle.com/cd/E11882_01/appdev.112/e25519/composites.htm#LNPLS99931