For centuries the Chico River has been the river for the tribes that inhabit Kalinga Province in the northern Philippnes.

Now it has become their river of despair.

A government project to build four dams to harness the Chico River for electricty would help lower the Philippines' oil import bill, but it would also dislocate nearly 100,000 Kalingas or nearly three-fourths of the total cultural minority. The dams would destroy most of the Kalingas' orchards and their spectacular rice terraces, which their ancestors built with their bare hands on levels stretching 5,000 feet up the rugged Cordellera Mountians.

More important, anthropologists say, the project would destroy the Kalingas' unique communal way of life.

The project thus has become one more example of a classic conflict in many Third World countries: the struggle between the need for national economic development and people's age-old traditions and customs.

Moreover, some observers warn that the Kalinga chieftains' opposition to the project could make the province as troublesome for the government as the southern island of Mindanao, the site of an eight-year-old Moslem secessionist movement.

In an atmosphere of rebellion the Kalingas held a rally on July 19 in Tinlayen, 270 miles north of Manila to reiterate their vow to fight to the death against the dam project. They were spurred on by the murder of their charismatic leader, Macli-ing Dulag, 48. He was shot 10 times, eyewitnesses claimed, by soldiers of the 44th army in his house on the night of April 24.

The government had promised an inquiry while hinting that Dulag's death may not be connected to the dam, but was precipitated by the theft of a rifle from an Army outpost. The tribe is unconvinced.

A petition was signed in blood by the tribal leaders demanding that the government stop the project completely. But they held out hope that one last dialogue would avert an allout conflict.

Some leaders at the rally called for and end to all talks and urged the people to "do what is being done in Mindanao."

While armed rebellion by the Kalingas does not seem imminent, explosive factors are present. The Chico dam issue has come to involve non-Kalingas as well.

Communist New People's Army, which infilitrated Kalinga Province in 1976 to exploit the grievances against the dam, has forged an alliance with the tribe to provide logistics and leadership in a guerrilla war that the communist have been fighting in the countryside throughout the Philippnes.

A new boost for the Kalingas came from the nonradical faction of the opposition to the martial-law government of President Ferdinand Marcos. Leading opposition figures, 81-year-old Lorenzo Tanada and human rights lawyer Jose Diokno, traveled to Tinlayen to pledge their support.

Diokno told us at the rally: "Let us do everything to avoid bloodshed. But if after everything has been done, then you have the right to self-defense. It is not only moral, but a legal right."

Violence has marred attempts to begin work on the multimillion-dollar, 850-megawatt project since 1974. The governmnet had hoped it would be financed by the World Bank, but the financing remains in doubt because of the controversy.

The project was born in 1973 when a West German firm, Lahmeyer International made a feasibility study and proposed a multipurpose irrigation project.

The Philippnes desperately needs to tap its own domestic energy sources.Oil imports account for more than 95 percent of its energy needs, expected to cost $2.6 billion this year. Increasing prices have made the Chico dam top priority.

Yet the Kalinga tribe will derive no benefit from the dam, sociologists say. Electricity will be fed to the industries in Manila and in central Luzon.

The Kalingas also are alarmed by precedents of bad faith by the government in dealing with cultural minorities elsewhere. Neighboring tribes relocated to make way for the Pantabangan and Ambuklao dams more than 20 years ago still have no land, and have been reduced to begging and becoming wandering dancers in Manila.

The Kalingas said they were never consulted when survey work began. Kalinga men and women armed with spears chased away survey teams from the National Power Corp. the government agency in charge of building the dam.

They attacked and dismantled the work camps near the capital of Tabuk three times. The ministry in charge of cultural minorities tried persuasion, then bribery and coercion to get the tribes to relocate. With distrust and desparation deepening, the Communists walked into a ready-make situation.

The government responded by sending troops. The Kalingas charge that apart from mortaring several villages suspected of hiding the communist guerrillas, the troops have caused the Kalingas economic hardships, raped women and pilfered their houses and granaries.

The Chico dam issue has become a dead end for both sides. The National Power Corp. hopes that the Kalingas hatred will die down, but is as determined to push the project as the tribe is to stop it.

As one official put it: "If we cancel the Chico dam, we might as well cancel all other projects because some people object."