How do remittances benefit national economies?

Well, for starters, it affects the local buying/spending economy. When this money (let’s say GBP), exists the UK and terminates in the Philippines (for example), there is less economic activity in the UK had the money stayed in the UK.

The money supply does not change per se, only the local economic activity does, which also means, the government is able to collect fewer (direct & indirect) taxes on this money and the circulatory effects of this money to keep the economy churning, lessened.