Declining income from tourism and increased imports of construction material between April and June resulted in an $8 million decline in the Island's balance of payments surplus.

The Bermuda Monetary Authority said yesterday the current account surplus for the period fell $8 million or 17.7 percent compared to the same quarter in 1994.

At the end of second quarter, the current account surplus was estimated at $37 million compared to $45 million a year earlier.

"Initial estimates for the second quarter indicate that the surplus on current account of the balance of payments decreased by $8 million when compared to the same period last year,'' the BMA said.

The current account consists of exports and imports of goods and services.

A current account surplus or deficit is the amount by which exports of goods and services plus inward transfers exceeds, or falls short of, imports of goods and services.

On the payment side, the largest increase was in the merchandise imports account, up $35 million to $179 million.

The increase could reflect the large construction projects taking place on the Island, the BMA said.

Also on the payment side, the shipping and other transportation account increased by $4 million to $27 million while a jump in resident trips abroad resulted in the travel account increasing by $2 million to $37 million.

On the receipts side, the major revenue earner -- tourism -- dropped $5 million to $171 million.

"The balance of payments are, to a large extent, based on estimated and historical data,'' said the BMA.

The quarterly report also said: Over the first six months of 1995, the Bermuda dollar money supply showed a 2.6 percent increase to its highest level ever, $1,948 million; Bank and deposit company combined dollar deposit base at the half-year was $1,073 million, 3.4 percent below the all time high of $1,114 million recorded at the end of September 1994; Banks and deposit company foreign currency deposits dropped $426 million from the all time high of $6,815 million at the end of 1994; Combined balance sheets for banks and deposit companies, at $11,960 million at the end of June 1995, fell 3.9 percent from the all time high of $12,447 million at the end of 1994; The BMA also reported collective investment schemes (CISs) rose to 615 from 487 at the end of second quarter last year while net asset value (NAV) increased to $13.68 billion compared to $11.6 billion at the end of second quarter last year.

But the CIS NAV declined to $13.68 billion from $14.43 billion at the end of first quarter of 1995.

The number of local company applications approved declined by 14 to 141 for second quarter compared to the same quarter last year.

Total exempted company application approvals were 392, down from 483 in the second quarter of 1994.

The BMA also said an updated code of conduct on the criminal use of financial institutions' systems has been issued.

The enhanced code encompasses recent international anti money laundering initiatives from the Vienna Convention, the Financial Action Task Force, the Basle Committee on Banking Supervision and the International Organisation of Securities Commissions.

The updated code broadens the signatory base to include investment service providers.

The code's principles have been accepted by a significant number of financial institutions, including the Island's three banks.