Cut in butter with pastry blender or 2 knives until mixture resembles coarse crumbs. Gradually stir in water with fork until blended; press onto bottom of 8-inch square pan.
Bake 20 min. or until lightly browned. Reduce oven temperature to 350F.
Beat eggs in same bowl with mixer on high speed until frothy. Gradually beat in sugar until thick and lemon colored. Stir in coconut.
Spread preserves over crust to within 1/4 inch of edges; cover with coconut mixture.
Bake 25 min. or until golden brown. Cool completely before cutting into bars.
